Stocks: 3 Red Flags

The S&P just hit a new high, but the bond market, Netflix and Caterpillar are sending worrisome signals.

The stock market came roaring back to life after the debt ceiling was raised last week, but now looks like it needs a little rest. The bullish trend that began almost one year ago remains intact, but as they say, nothing moves in a straight line. And that means investors do not have to chase the market right now.

The Standard & Poor's 500 reached the top of a ragged rising trend channel Tuesday (see Chart 1). A rising trend channel is simply a trendline drawn through a rally's lows and a parallel line drawn through its...